Madras High Court
Erode Infrastructures Pvt. Ltd vs Rail Land Development Authority on 21 August, 2023
W.A.No.761 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21.08.2023
CORAM :
THE HON'BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU
W.A.No.761 of 2023
Erode Infrastructures Pvt. Ltd.,
rep. by Director M.Jagannathan,
4/337, Srinivas Athathampalayam,
Vallipurathampalayam Post,
Erode-636 112. .. Appellant
Vs
1.Rail Land Development Authority,
(A Statutory Authority under Ministry of Railways)
rep. by its General Manager (Projects)
Moti Bagh-1,
Near Safdargung Railway Station,
New Delhi-110 021.
2.Rail Land Development Authority,
(A Statutory Authority under Ministry of Railways)
rep. by its Deputy General Manager Land-1,
Moti Bagh-1,
Near Safdargung Railway Station,
New Delhi-110 021.
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W.A.No.761 of 2023
3.The Deputy General Manager (Projects),
Rail Land Development Authority,
Moti Bagh-1,
Near Safdargung Railway Station,
New Delhi-110 021. .. Respondents
Prayer: Appeal under Clause 15 of the Letters Patent against the order
dated 29.4.2022 passed by the learned Single Judge in W.P.No.61281
of 2018.
For the Appellant : Mr.V.Raghavachari
Senior Counsel
assisted by Ms.V.Abirame
for M/s.R.Ganesan
For the Respondents : Mr.Siddharth Bahety
JUDGMENT
(Delivered by the Hon'ble Chief Justice)
We have heard Mr.V.Raghavachari, learned Senior Counsel for
the appellant and Mr.Siddharth Bahety, learned counsel for the
respondents.
2. The order dated 29.4.2022 passed by the learned Single
Judge in W.P.No.1281 of 2018 filed by the present appellant is
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W.A.No.761 of 2023
assailed.
3. The present appellant had filed the writ petition seeking a
direction against the respondents to execute the lease agreement
so as to enable the appellant to complete the project as
contemplated under the Regulations.
4. Pursuant to the proposal of the respondents to construct
and maintain the railway line for commercial development and
tender for development of multi-functional complexes at Erode
junction railway station, the appellant had bid. The bid of the
appellant for an amount of Rs.3,08,27,800/- was accepted for the
lease period of 45 years and letter of acceptance was issued. The
appellant did not make payment of the first installment within the
time stipulated. The respondents, on 3.1.2018, had cancelled the
letter of acceptance, inter alia, the contract. The appellant
deposited the first installment with interest on 6.1.2018 and filed
the writ petition.
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W.A.No.761 of 2023
5. The learned Single Judge allowed the writ petition partly by
setting aside the order of the second respondent cancelling the
letter of acceptance and forfeiting the amount. The learned Single
Judge directed the appellant to pay the remaining installments
along with simple interest as stated in the tender condition on or
before 29.6.2022.
6. Learned Senior Counsel for the appellant/writ petitioner
submits that the learned Single Judge has arrived at a conclusion
that the cancellation letter issued by the second respondent is
illegal and set aside the same. As such, during the period the
matter was pending before this Court, the appellant shall not be
liable to pay the interest. According to learned Senior Counsel for
the appellant, the appellant is not at fault for the pendency of the
matter for such a long period before the learned Single Judge.
7. According to learned counsel for the respondents, the terms
of the contract are explicit and clear. As per the terms of the
contract, the appellant is required to pay 15% interest on the
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W.A.No.761 of 2023
delayed payment so also after the stipulated period, 3% penal
interest is also required to be borne by the appellant.
8. It is not disputed that the writ petition was filed in the year
2018 and it took almost four years for the writ petition to be
decided.
9. The pendency of the writ petition should not be detrimental
to the interest of any party, so also should not enure to the benefit
of the party.
10. The writ petition was pending. The appellant had not
deposited the remaining installments in Court so as to arrest the
charging of interest.
11. The Apex Court, in the case of Municipal Corporation of
Greater Mumbai v. Harish Lamba of Bombay, Indian Inhabitant and
others, reported in (2020) 15 SCC 171, has observed with regard to
the payment of interest during the pendency of the writ petition as
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W.A.No.761 of 2023
under:
“29. ..... Applying the principle underlying these
decisions, we deem it appropriate to quantify the
interest component at the rate of 18% p.a. on the
outstanding principal tax amount or the statutory
interest as may have been prescribed under the
extant Regulations, whichever is less, for the
period during the pendency of writ petition and the
present appeal, as the case may be. For rest of
the default period, from the date of demand
notices until payment of the outstanding amount
mentioned therein, the respondents shall be liable
to pay interest at the rate as prescribed in the
extant Regulations applicable in that regard. This
would meet the ends of justice.”
12. The respondents have not challenged the order passed by
the learned Single Judge, wherein its order of cancelling the letter
of acceptance is set aside. At the same time, the respondents are
also deprived of the use and enjoyment of the amount as the
appellant did not deposit the remaining installments.
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W.A.No.761 of 2023
13. To balance equities, it will be appropriate if the
respondents are allowed to charge interest at the rate of 15% per
annum (simple interest) and not the penal interest of 3%.
14. The time awarded by the learned Single Judge has
expired.
15. In the light of that, we modify the order and pass the
following order:
(1) The order passed by the learned Single Judge
of setting aside the impugned order is maintained.
(2) The appellant/writ petitioner shall deposit the
remaining installments along with simple interest
at 15% per annum on or before 05.09.2023.
(3) If the appellant fails to deposit the amount as
directed above on or before 5.9.2023, then the
present appeal shall axiomatically stand dismissed.
(4) If the appellant deposits the amount as
directed above, then the parties shall perform
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W.A.No.761 of 2023
further part of the contract as is stipulated.
(5) The payment of GST or any other tax, shall be
paid as per the terms of the contract.
16. With these observations and directions, the writ appeal is
disposed of. There will be no order as to costs. Consequently,
C.M.P.No.7403 of 2023 is closed.
(S.V.G., CJ.) (P.D.A., J.)
21.08.2023
Index : Yes/No
Neutral Citation : Yes/No
bbr
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W.A.No.761 of 2023
To
1.The General Manager (Projects),
Rail Land Development Authority,
Moti Bagh-1, Near Safdargung Railway Station,
New Delhi-110 021.
2.Rail Land Development Authority,
(A Statutory Authority under Ministry of Railways)
rep. by its Deputy General Manager Land-1,
Moti Bagh-1, Near Safdargung Railway Station,
New Delhi-110 021.
3.The Deputy General Manager (Projects),
Rail Land Development Authority,
Moti Bagh-1, Near Safdargung Railway Station,
New Delhi-110 021.
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W.A.No.761 of 2023
THE HON'BLE CHIEF JUSTICE
AND
P.D.AUDIKESAVALU,J.
bbr
W.A.No.761 of 2023
21.08.2023
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